Homepath.com question

[Scott W.]

I have notice homepath offers a deal for investors where you can put down 10% & not pay PMI. Sounds like a deal too good to be true? Their prices seem rather comparable with other foreclosure comps.

Is their deal too good to be true?

[Russell Monson]

I actually closed on two of these deals this year in the SLC metro area. I used an experienced mortgage broker who had to filter through several lenders for me to find one that would actually do 10% down. Additionally, I had to patiently filter through 100s of homepath listings and make several offers to get a property under contract. The problem I ran into is that you can't go under contract on a Homepath property until owner occupants have had 15 days to make their offers on the property. This means that all of the really good deals go to the owner occupant buyers. To get around this, I just favorited (on homepath.com) every property that met my criteria whether it was under contract or not. If the OO buyer can't get financing or backs out, FNMA changes the status back to available for sale but there is no longer a 15 day waiting period. I check the site every day and offer on these properties immediately when they come back on the market. It's a bit of extra work this way, but it sure does make your down payment sources go a lot further. As others have noted the rates are a little bit higher but not bad. I closed one in Feb '12 at a rate of 4.5%, and one in July '12 at 4.25%. For an investment property with 10% down I thought that was an excellent rate for 30 year fixed money. Hope that's helpful!